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GAO: DOL Workers' Comp Program Made $13M in Improper Payments

The Department of Labor's Office of Workers' Compensation Programs (OWCP) mismanaged $13.3 million in improper payments in 2006, according to a report released by the Government Accountability Office (GAO).

GAO alleged that OWCP failed to fulfill its duty of managing improper payments in the Federal Employee Compensation Act (FECA) program. GAO pointed out that none of OWCP's performance goals addressed the issue and the agency did not “sufficiently emphasize preventing, detecting and recovering improper payments.”

In fact, GAO reported that OWCP only prioritized quick processing of claims and quickly returning claimants to work. GAO said it was important to strike a balance between service delivery and ensuring payment accuracy.

The Labor Department estimated that the FECA program administered $703,000 in improper payments in FY 2006. But the estimate “does not capture all types of improper payments and it does not include the improper payments that OWCP identified during the year,” which GAO estimated to be 13.3 million for 2006 — $7.1 million in overpayments and $6.2 million in underpayments.

The Labor Department disagreed with GAO's findings, claiming that the report included “erroneous payments” that actually were made in previous years to determine the number of improper payments in FY 2006. The department also argued that it was never provided with case names and numbers, “which greatly limit our ability to comment or verify the accuracy of GAO's findings.”